U.S. Gulf: Prompt NOLA granular barge prices continued to crater last week. Most put the low at $183/st FOB. A report of $182/st FOB could not be confirmed. The high for the week was put in the $196-$200/st FOB range. With falling prices, sources said buyers appear to be waiting until the very last minute to pull the trigger. The same sentiment was reported in regional markets.
Prills last week were being pulled into the granular hole, with new trades called $191-$193/st FOB. Product was reportedly being snapped up for re-export.
Eastern Cornbelt: The granular urea market was pegged at $225-$245/st FOB in the Eastern Cornbelt, with the low end reported out of spot river locations and reflecting a $5/st drop from the previous week. The slide was attributed to further declines in NOLA barge values at mid-month, although sources reported no new buying at the terminal level.
Western Cornbelt: Urea prices in the Western Cornbelt were once again under pressure as NOLA barge values slipped for the week. Sources quoted the low end of the range at $220-$225/st FOB out of spot river terminals, including St. Louis, Mo., and Minneapolis, Minn. The upper end of the regional market was pegged at $235-$240/st FOB at mid-month, but sources reported no activity to test the market.
The Catoosa, Okla., urea market had also reportedly fallen to $220-$225/st FOB for the week.
California: Granular urea had reportedly slipped to $315-$325/st FOB port terminals in California, although reference prices remained in the $330-$350/st FOB range, depending on location and supplier. Sources reported no confirmed rail-DEL urea pricing in the state in mid-April.
Pacific Northwest: Sources reported a generally steady urea market in the Pacific Northwest. “We did not have the earlier run-up on urea and UAN that the NOLA market experienced, and therefore I don’t anticipate a large decline until distributors start landing the lower-priced products from the east,” said one regional contact.
While reference prices for granular urea remained at $320/st FOB port terminals in the Pacific Northwest, sources quoted the low end of the market at the $305/st FOB level after netbacks. Rail-DEL urea was reported at $310-$320/st in the region at mid-month, but sources said most dealers had already positioned tons earlier in the $320-$340/st DEL range.
Western Canada: Sources tagged the granular urea market at $465-$480/mt DEL in Western Canada, depending on location. The lower numbers were quoted in the eastern prairies, which sources said is more heavily influenced by the Minneapolis market.
Although there were reports of delivered urea tons being quoted for as low as $450/mt in early April, actual business at that level could not be confirmed. “You could probably get that from the Minneapolis market even with higher freights, so the Canadian manufacturers may make some changes as the spring unfolds,” said one regional contact.
India: Eight companies were awarded a total of about 720,000 mt in the MMTC urea tender. The bulk of the tonnage will go to West Coast ports at $229.80/mt CFR, with about 175,000 mt to East Coast ports at $231.50/mt CFR.
Sources said MMTC was unwilling to offer a range of prices for each coast. One trader said MMTC was already paying more than the last tender and apparently had no desire to pay anything higher than the lowest offer for each coast.
| Company | Quantity (mt) | Source | Discharge |
| Comzest | 240,000 | Iran | West Coast |
| TransAgri | 150,000 | Iran | West Coast |
| Transglobe | 55,000 | Iran | West Coast |
| Fertil | 45,000 | UAE | West Coast |
| Keytrade | 44,000 | Oman | West Coast |
| Swiss Singapore | 60,000 | China | East Coast |
| Sinochem | 60,000 | China | East Coast |
| Aries | 55,000 | China | East Coast |
Reportedly, MMTC stopped issuing awards earlier than expected. Sources said the 720,000 mt it booked is expected to be enough to last well into the summer. One trader noted that between the two tenders so far, India has more than 1 million tons coming in by the end of June.
Sources are now looking to the next tender in mid- to late-May. One option is to also wait until June. One source noted that the end of May is the annual IFA conference. The Indian buyers – most likely STC – may want to assess the condition of the market at the IFA event and then make appropriate buying plans, he said.
Sellers may have some help making their case for imported urea. Domestic producers in India have been talking about how the low international price is hurting them. They now predict annual production will dip to 24.3 million mt, compared with earlier estimates of 24.7 million mt.
China: Producers are ready to make the switch from the domestic to export seasons. Sources said the domestic season is beginning to wind down, but it is still too early to make plans for exports. Several companies are reportedly looking to take some plants down for routine maintenance in May.
The awards of Chinese product in the Indian tender have a netback of $219-$220/mt FOB. The general view is that these tons are some leftover granular that has been homeless for a while. Traders said prilled urea remains a few dollars more expensive in the domestic market.
Industry watchers said the Chinese producers will continue to hold a firm line on prices even as the market focus shifts from domestic to international. One trader said that if the Indian buyers push prices too low for the producers, the Chinese makers will shift their focus to closer buyers who are willing to make smaller, but more lucrative, deals.
Indonesia: The deals Kaltim hoped to nail down last week all fell through.
Sources reported that Radiance, which won the bids for 60,000 mt of granular urea at $230/mt FOB, walked away from the deal. At the same time, sources said rumors are circulating that Quantum also walked from the long-term deal for 50,000 mt.
The Indonesians are now reportedly ready to hold another auction for the spot tons and a series of long-term lifting orders on a formula basis. One trader noted, however, that the floor price for the Indonesia goods is too high to find a buyer in the area.
Middle East: The awards made in the Indian tender helped form a temporary floor on prices. Sources said the Arab Gulf price has been on a downward slope for several weeks. The $221/mt FOB price offered by Fertil to MMTC has now become the lowest amount producers will accept in any talks.
The move comes after industry watchers were calling the late-April and May price closer to $205/mt FOB. Sources expect to see prices remain stable for the next several weeks.
Pakistan: The government is once again allowing about 300,000 mt of urea to be exported. Sources said the word coming out of Pakistan is that the country has more than enough for the upcoming season, with producers able to turn out more if necessary.
One international trader said the exports will only occur if the price is right. The recent uptick in pricing into India prompted the Pakistan government to look at exports again. Sources added that as long as the domestic producers get all the natural gas they require to run their plants at full capacity, Pakistan could become a small-quantity exporter on a regular basis.